Update: NY Law Suit on Revealing Auction Seller Names

Last fall I posted on a NY State lawsuit which had the implication of forcing NY auction houses to reveal sellers names (click HERE to read the original post).  Since then there has been a general debate on how impactful the ruling would be, and if it would be overturned on appeal.

The NY Times is now reporting the ruling will now be reviewed by New York's highest court.  If the law stands, it may require auction house to reveal to the buyer who the consignor was, and if not provided, the buyer could legally walk away from the purchase.  There is also a school of thought that the revealing of the sellers name comes about only if the buyer initially renegs on the purchase.  The high court ruling will be interesting to watch for, and also if the auction industry goes to NY State and lobbies for protection.

The NY Times reports

Most sellers in the New York auction market remain anonymous, and auction catalogs typically reveal little more than that a work is from a “private collection.” The court did not rule that auction houses had to publicize widely the name of a seller, only that buyers are entitled to know it. Buyers — themselves often people who anonymously sell items at auction — have seldom complained about the practice, while sellers have come to expect their identities to be shielded.

But in October, in a dispute over the sale of a 19th-century silver-and-enamel Russian box, a four-judge appellate-court panel unanimously ruled that state law has long required that buyers be given the names of sellers in postauction paperwork for the deal to become binding.

Many art-law experts say the decision, if upheld, could significantly change the way the auction business is conducted in New York State.

“As of now you can back out of any transaction where the name of the seller is not provided,” said Peter R. Stern of McLaughlin & Stern, a Manhattan lawyer who represents dealers, collectors and auction houses and was an outside counsel to Sotheby’s.

The lawyer for the auctioneer in the case said Christie’s had inquired about submitting a brief when the New York Court of Appeals, which last month announced its intention to review the case, takes it up this spring. The auction house declined to comment.

Jonathan A. Olsoff, director of worldwide litigation for Sotheby’s, said that auction house viewed the decision as “narrow and technical” and that others were overstating its impact. Although fine-arts sales are the highest-profile auctions in the state, the ruling would also affect the sale of other items, like heirlooms, vehicles and livestock, which are also typically auctioned anonymously by hundreds of companies every week.

Source: The NY Times